TD Asset Management Inc. ("TDAM") et al.

Headnote

Investment by mutual funds in securities of another mutual fund that is undercommon management for specified purpose exempted from the requirements ofclause 111(2)(b), subsection 111(3) clauses 117(1)(a) and 117(1)(d) subject tocertain specified conditions.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990 c.S.5, as am. ss. 111(2)(b), 111(3), 113,117(1)(a), 117(1)(d), 117(2), 118(2)(a) and 121(2)(a)(ii).

WHEREAS the local securities regulatory authority or regulator (the"Decision Maker") in each of British Columbia, Alberta, Saskatchewan, Manitoba,Ontario, Québec Nova Scotia and Newfoundland (the "Jurisdictions") has receivedan application from TDAM, as manager, trustee, promoter and principal distributorof the Original RSP Funds and the New RSP Funds and other mutual fundsmanaged by TDAM after the date of this Decision (the "Future RSP Funds", andtogether with the Original RSP Funds and the New RSP Funds, the "RSP Funds")having an investment objective or strategy that is linked to the returns of anotherspecified TDAM mutual fund (collectively referred to as the "Underlying Funds") fora decision by each Decision Maker (collectively, the "Decision") under the securitieslegislation of the Jurisdictions (the "Legislation") that the following provisions of theLegislation (the "Applicable Legislation") shall not apply to the RSP Funds orTDAM, as the case may be, in respect of certain investments to be made by theRSP Funds in the Underlying Funds from time to time:

1. the restrictions contained in the Legislation prohibiting a mutual fund fromknowingly making and holding an investment in a person or company inwhich the mutual fund, alone or together with one or more related mutualfunds, is a substantial securityholder; and

2. the requirements contained in the Legislation requiring the managementcompany to file a report relating to a purchase or sale of securities betweenthe mutual fund and any related person or company, or any transaction inwhich, by arrangement other than an arrangement relating to insider tradingin portfolio securities, the mutual fund is a joint participant with one or moreof its related persons or companies;

AND WHEREAS the Decision Maker in each of the Jurisdictions hasreceived an application from TDAM, as manager, trustee, promoter and principaldistributor of the Original RSP Funds for a Decision under the Legislation revokingand replacing the MRRS Decision Document dated November 15, 1999 entitled Inthe Matter of TD Asset Management Inc. (the "Original Decision") which decidedthat the following requirements and restrictions contained in the Legislation (the"Requirements") did not apply in respect of certain investments to be made by theOriginal RSP Funds in the Original Underlying Funds:

A. the Requirements requiring each Original RSP Fund and TDAM (asmanager) to issue a news release and file a report where its aggregateholdings by an Original RSP Fund or Original RSP Funds of securities of anUnderlying Fund exceed 10 percent of the outstanding securities of theUnderlying Fund and the requirements to not acquire or offer to acquiresecurities of such Underlying Fund pending the expiration of one businessday from the date the report is filed;

B. the Requirements prohibiting the Original RSP Funds from knowingly makingan investment in a person or company which the mutual fund, alone ortogether with one or more related mutual funds, is a substantial securityholder;

C. the Requirements prohibiting the Original RSP Funds from knowingly holdingan investment in a person or company which the mutual fund, alone ortogether with one or more related mutual funds, is a substantial securityholder; and

D. the Requirements requiring TDAM to file a report relating to a purchase orsale of securities between an Original RSP Fund and any related person orcompany.

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the principalregulator for this Application;

AND WHEREAS TDAM has represented to the Decision Makers as follows:

1. TDAM is a corporation incorporated under the laws of Ontario. The registeredand head office of TDAM is located in Ontario. TDAM is, or will be the manager,trustee, promoter and principal distributor of each of the RSP Funds. TDAM is,or will be the manager, trustee, promoter and principal distributor of theUnderlying Funds.

2. TDAM established the Original RSP Funds as open-ended mutual fund trustsunder the laws of Ontario and qualified the Original RSP Funds for distributionin all Jurisdictions pursuant to a simplified prospectus and annual informationform (collectively, a "Prospectus") dated November 15, 1999. TDAM proposesto establish the New RSP Funds as open-ended mutual fund trusts under thelaws of Ontario and to qualify the New RSP Funds for distribution in allJurisdictions pursuant to a Prospectus to be filed in October, 2000. TDAM alsoproposes to establish any Future RSP Funds as open-ended mutual fund trustsunder the laws of Ontario and to qualify such RSP Funds for distribution in allJurisdictions pursuant to a Prospectus.

3. Each Underlying Fund is, or will be, an open-ended mutual fund trustestablished under the laws of Ontario, and each Underlying Fund is, or will be,qualified for distribution in all Jurisdictions by means of a Prospectus. EachUnderlying Fund of the Original RSP Funds and New RSP Funds is not indefault of any requirements of the Legislation.

4. Each RSP Fund seeks or will seek, to achieve its investment objective whileensuring that securities of the RSP Fund do not constitute "foreign property" forregistered retirement savings plans ("RRSPs"), including "group RRSPs" andlocked-in retirement accounts, registered retirement income funds, including lifeincome funds, deferred profit sharing plans and registered education savingsplans (the "Registered Plans").

5. The Prospectus for each RSP Fund does, or will, contain disclosure with respectto the investment objective and investment policies of each RSP Fund. Theinvestment objective of the RSP Fund is, or will be, to achieve long-term capitalappreciation primarily by investing in derivative instruments that permit the RSPFund to link its performance to its corresponding Underlying Fund, whileensuring that securities of the RSP Funds do not constitute "foreign property"for Registered Plans. In order to achieve its investment objective, each RSPFund will invest directly in, and will use derivative instruments to obtainexposure to, its corresponding Underlying Fund, as described in paragraph 7herein.

6. The investment objective of each Underlying Fund is, or will be, achievedthrough investment primarily in foreign securities.

7. Each RSP Fund does, or will, invest, its assets in securities such that itssecurities will be "qualified investments" for Registered Plans and will notconstitute foreign property in a Registered Plan. The direct investment by eachRSP Fund in its corresponding Underlying Fund (the "Permitted RSP FundInvestment") is, or will be, in an amount which will not exceed the amountprescribed from time to time as the maximum permitted amount capable of beingmade as a foreign property investment under the Income Tax Act without theimposition of tax under Part XI of that Act (the "Foreign Property Maximum").The amount of direct investment by each RSP Fund will be adjusted from timeto time so that, except for transitional cash, the aggregate of direct investmentin, and derivative exposure to, its corresponding Underlying Fund will equal100% of the assets of the Fund.

9. Except to the extent evidenced by this Decision, and another decision of theDecision Makers in respect of TDAM and the RSP Funds dated September 15,2000 and specific approvals granted by the Canadian securities administratorspursuant to National Instrument 81-102, the investments by an RSP Fund in itscorresponding Underlying Fund has been, and will be, structured to comply withthe investment restrictions of the Legislation and National Instrument 81-102.

10. In the absence of this Decision, as soon as the aggregate holdings by an RSPFund of the securities of its corresponding Underlying Fund exceed 10% of theoutstanding securities of the Underlying Fund, TDAM, and possibly the RSPFund, would be required to comply with the reporting and other requirements ofthe Legislation.

11. In the absence of this Decision, each RSP Fund would be prohibited from (a)knowingly making an investment in a person or company in which the mutualfund, alone or together with one or more related mutual funds, is a substantialsecurityholder; and (b) knowingly holding an investment referred to insubsection (a) hereof. As a result, in the absence of this Decision, an RSP Fundwould be required to divest itself of any investments referred to in subsection (a)herein.

12. In the absence of this Decision, TDAM would be required to file a report of everypurchase or sale by an RSP Fund of the securities of its correspondingUnderlying Fund.

13. Each RSP Fund's investment in, or redemption of, securities of itscorresponding Underlying Fund represents, or will represent, as the case maybe, the business judgement of responsible persons uninfluenced byconsiderations other than the best interests of the RSP Fund.

AND WHEREAS pursuant to the System this Decision Document evidences thedecision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each Decision Maker is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;

The Decision of the Decision Makers pursuant to the Legislation is that theOriginal Decision is hereby revoked and replaced with the following Decision with effectas of, and from, the date hereof.

The Decision of the Decision Makers pursuant to the Legislation is that theApplicable Legislation shall not apply so as to prevent an RSP Fund from investing in,or redeeming, the securities of its corresponding Underlying Fund, and suchinvestment does not require further consent from or notice to securityholders of theRSP Funds or the Decision Makers.

PROVIDED THAT:

1. this Decision, as it relates to the jurisdiction of a Decision Maker, will terminateone year after the publication in final form of any legislation or rule of thatDecision Maker dealing with the application of subsection 2.5(1) of NationalInstrument 81-102 Mutual Funds to mutual funds such as the RSP Funds; and

2. this Decision shall only apply in respect of an RSP Fund's investments in, ortransactions with, its corresponding Underlying Fund if such investments ortransactions are made in compliance with the following conditions:

(a) each RSP Fund and its corresponding Underlying Fund is, or will be,under common management and the Underlying Fund's securities are,or will be, offered for sale in the Jurisdiction of the Decision Makerpursuant to a Prospectus which has been filed with, and accepted by, theDecision Maker;

(b) each RSP Fund restricts, or will restrict, its aggregate direct investmentin its corresponding Underlying Fund to a percentage of its assets thatis within the Foreign Property Maximum;

(c) each RSP Fund's investment in its corresponding Underlying Fund is, orwill be, compatible with the fundamental investment objective of the RSPFunds;

(d) each RSP Fund will not invest in an Underlying Fund whose investmentobjective includes investing in other mutual funds;

(e) the Prospectus of each RSP Fund describes, or will describe, the intentof the RSP Fund to invest in a corresponding Underlying Fund;

(f) each RSP Fund may only change its Permitted RSP Fund Investment ifit changes its fundamental investment objective in accordance with theLegislation;

(g) no sales charges are, or will be, payable by an RSP Fund in relation toits investment in the securities of its corresponding Underlying Fund;

(h) there are, or will be, compatible dates for the calculation of the net assetvalue of an RSP Fund and its corresponding Underlying Fund for thepurpose of issuing and redeeming the securities of such mutual funds;

(i) no redemption fees or other charges are, or will be, paid by an RSP Fundwhen it redeems any securities of its corresponding Underlying Fund;

(j) the arrangements between or in respect of the RSP Fund and itscorresponding Underlying Fund are, or will be, such as to avoid theduplication of management fees;

(k) no fees and charges of any sort are, or will be, paid by an RSP Fund, itscorresponding Underlying Fund or TDAM or by any affiliate or associateof any of the foregoing entities to anyone in respect of an RSP Fundsinvestment in, or redemption of, the securities of its correspondingUnderlying Fund;

(l) in the event of the provision of any notice to securityholders of anUnderlying Fund as required by the constating documents of theUnderlying Fund, or by the laws applicable to the Underlying Fund, suchnotice will also be delivered to the securityholders of the correspondingRSP Fund. All voting rights attached to the securities of an UnderlyingFund which are owned by an RSP Fund will be passed through to thesecurityholders of the RSP Fund. In the event that a securityholdersmeeting is called for an Underlying Fund, all of the disclosure and noticematerial prepared in connection with such meeting will be provided to thesecurityholders of the corresponding RSP Fund and such securityholderswill be entitled to direct a representative of the RSP Fund to vote theRSP Funds holdings in the Underlying Fund in accordance with theirdirection. The representative of the RSP Fund will not be permitted tovote the RSP Funds holdings in its corresponding Underlying Fundexcept to the extent the securityholders of the RSP Fund so direct;

(m) in addition to receiving the annual and, upon request, the semi-annualfinancial statements, of an RSP Fund, securityholders of the RSP Fundwill receive the annual and, upon request, the semiannual financialstatements, of its corresponding Underlying Fund in either a combinedreport, containing both the RSP Fund's and the Underlying Fund'sfinancial statements, or in a separate report containing the UnderlyingFunds financial statements; and

(n) to the extent that an RSP Fund and its corresponding Underlying Funddo not use a combined simplified prospectus, annual information formand financial statements containing disclosure about both the RSP Fundand the Underlying Fund, copies of the simplified prospectus, the annualinformation form and the annual and semi-annual financial statements,relating to the Underlying Fund may be obtained upon request by asecurityholder of the RSP Fund.

October 10^th, 2000.

"J. A. Geller"    "Howard I. Wetston"